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THE real estate and housing sub-sector in recent years has emerged as a major one in the country. There are criticisms against the activities of some elements in this sub-sector. But it should be noted that no area of life in this country is devoid of malpractices and irregularities. In this situation, the housing and real estate operators can be credited, on the whole, for meeting the needs of housing of various sections of people in the society. Although the homes or apartments built and transferred to buyers benefit mainly the rich or the upper classes or middle classes, they are, nonetheless, contributing in a significant way to economic activities in the country. The construction sector has proved to be one of the booming sectors in the last decade and the present one. The share of the housing and real estate sub-sector in it has been a major one. Therefore, the suggestions conveyed to the Ministry of Commerce by the representatives of the Real Estate and Housing Association of Bangladesh (Rehab) last Saturday merit an immediate and positive consideration and actions thereof on the part of the government.
The suggestions are mainly to withdraw 'temporarily' the existing duties and value added taxes (vat) on all kinds of finished iron products and their raw materials. Such duty and tax exemption, as underlined by Rehab, would lead to an instant fall in the prices of construction materials and hence a major slashing down of construction costs. This, in turn, would breathe a new lease of life to this sub-sector which has been stagnating, of late, from the soaring prices of construction materials, particularly iron products. The Rehab is also asking for controls on the rising prices of cement, electrical materials, etc., which are also regarded as basic to construction activities.
The concessions requested by Rehab are sensible because this body is not demanding a permanent waiver of duties and taxes or of closer regulatory actions in respect of the sale of construction materials. It is asking for a temporary reprieve from very abnormal price escalation of construction materials which is impacting severely on its activities. The government will, of course, weigh the loss in terms of revenues from withdrawing duties and taxes. But such reduction in revenues, when contrasted with the likely bigger loss to result from a major slowdown in the construction sector, would indicate the rationality of accepting the proposal for duty and tax reductions in the greater interest of the economy. Favourable actions on Rehab's proposals will benefit not only the housing and real estate activities but also the entire construction sector. The good effects of the same would also have spread-effects on the economy.
There are many factors associated with a buoyant construction sector. A booming construction sector creates and sustains the demand for a wide range of commodities ranging from sanitarywares to paints and some services as well. A stagnating construction sector pulls down also the growth or production of these goods and services. Besides, the direct negative effect of unemployment created due to job losses from dwindling construction activities is also a cause for concern.
Considering all of these factors, it would be a prudent decision on the part of the government to take action in relation to the suggestions put forward by Rehab with no loss of time.
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